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                                                                   EXHIBIT 10.32

 
                             EMPLOYMENT AGREEMENT
                             --------------------
                                 CONFIDENTIAL


     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into on the
22nd day of March, 1999, effective as of May 2, 1997 by and between Syntroleum
Corporation, a Kansas corporation (the "Company"), and Michael L. Stewart, an
individual (the "Employee").

     WHEREAS, the Company and Employee failed to enter into a written agreement
on Employee's original date of hire, May 2, 1997, and Employee and the Company
desire to have all terms, agreements, conditions, acknowledgments, duties,
rights, obligations, covenants and restrictions of this Agreement to be
effective as of, and to cover all periods of employment from, the original date
of hire; and

     WHEREAS, the Company desires to continue and employment relationship with
Employee and Employee is willing to accept continued employment on the terms and
conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the Company and Employee hereby agree as follows
effective as of May 2, 1997.

     1.   Employment and Duties. The Company employs Employee in the capacity of
          ---------------------
Vice President of Information Technology, or in such other position and at such
location as the Company may direct or desire and Employee hereby accepts such
employment, on the terms and conditions hereinafter set forth. Employee agrees
to perform such services and duties (including reasonable travel) and hold such
offices at such locations as may be reasonably assigned to him from time to time
by the Company and to devote substantially his full business time, energies and
best efforts to the performance thereof to the exclusion of all other business
activities, except any activities disclosed to the Company in advance and
consented to by the Company.

     2.   Compensation. As compensation for the services to be rendered by
          ------------     
Employee to the Company pursuant to this Agreement, Employee shall be paid the
following compensation and other benefits.

    (a)   Salary in the amount of $9,166.67 per month, payable in equal semi-
monthly installments in arrears, or such higher compensation as may be
established by the Company from time to time. Payments of salary shall be made
in accordance with the Company's usual payroll procedures.

    (b)   Employee shall be eligible to participate, to the extent he may be
eligible, in any group medical and hospitalization, profit sharing,
retirement, life insurance or other employee benefit plans which the
Company may from time to time offer to its employees.  All group insurance
provided to Employee shall be in such form and provide such coverage as is
provided to other employees of the Company.
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                                 CONFIDENTIAL


     (c)  All compensation payments to Employee shall be made subject to normal
deductions therefrom, including federal and state social security and
withholding taxes.

     3.   Life Insurance. The Company, in its discretion, may apply for and
          --------------
procure in its own name and for its own benefit, life insurance on the life of
Employee in any amount or amounts considered advisable by the Company. Employee
shall submit to any medical or other examination and execute and deliver any
application or other instrument in writing, reasonably necessary for the Company
to acquire such insurance.

     4.   Expenses.  The Company shall reimburse Employee for his actual out-of-
          --------                                                             
pocket expenses incurred in carrying out his duties hereunder in the conduct of
the Company's business, which expenses shall be limited to ordinary and
necessary items and which shall be supported by vouchers, receipts or similar
documentation submitted in accordance with the Company's expense reimburse
policy and as required by law.

     5.   Vacations and Leave. Employee shall be entitled to vacation and leave
          -------------------
in accordance with the Company's policies in effect from time to time.

     6.   Non-Disclosure of Confidential Information.
          ------------------------------------------

     (a)  Employee acknowledges that in and as a result of his employment by the
Company, he will be making use of, acquiring, and/or adding to the Company's
Trade Secret Information. Except as required in the performance of Employee's
duties under this Agreement, Employee will not use any Trade Secret Information
of the Company for Employee's own benefit or purposes or disclose to third
parties, directly or indirectly, any Trade Secret Information of the Company,
either during or after Employee's employment with the Company.

     (b)  As used in this Agreement, "Trade Secret Information" means
information, including, but not limited to, any formula, pattern, compilation,
program, device, method, technique or process, that: (i) derives independent
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy. For
purposes of this Agreement, "Trade Secret Information" includes both information
disclosed to Employee by the Company and information developed by Employee in
the course of his employment with the Company. The types and categories of
information which are considered to be Trade Secret Information include, without
limitation: (a) specifications, descriptions, designs, dimensions, content
(including chemical composition) and tolerances of products, parts and
components; (b) plans, blueprints, design packages construction, part and
assembly drawings and diagrams; (c) design, construction and component costs and
cost estimates; (d) the existence, terms or conditions of any agreements
(including license agreements) between the Company and any third party; (e)
computer programs (whether in the form of source

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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL



code, object code or any other form, including software, firmware and
programmable array logic), formulas, algorithms, methods, techniques, processes,
designs, specifications, diagrams, flow charts, manuals, descriptions,
instructions, explanations, improvements, and the ideas, systems and methods of
operation contained in such programs; (f) information concerning or resulting
from research and development work performed by the Company; (g) information
concerning the Company's management, financial condition, financial operations,
purchasing activities, sales activities, marketing activities and business
plans; (h) information acquired or compiled by the Company concerning actual or
potential customers; and (i) all other types and categories of information (in
whatever form) with respect to which, under all the circumstances, Employee
knows or has reason to know that the Company intends or expects secrecy to be
maintained and as to which the Company has made reasonable efforts to maintain
its secrecy.

     (c)  In the event that Employee is requested or required by applicable law
 or by deposition, interrogatory, request for documents, subpoena, civil
 investigative demand or similar process to disclose any of the Company's Trade
 Secret Information, Employee shall provide the Company with prompt written
 notice of such request or requirement prior to making the requested disclosure,
 and shall cooperate with the Company so that the Company may seek to protect
 the proprietary nature of such Trade Secret Information through available
 procedures, including a protective order or other appropriate remedy.

     (d)  The Company may also advise Employee from time to time as to
restrictions upon the use or disclosure of specified information which has been
licensed or otherwise disclosed to the Company by third parties pursuant to
license or confidential disclosure agreements which contain restrictions upon
the use or disclosure of such information. Employee agrees to abide by the
restrictions upon use and/or disclosure contained in such agreements.

     (e)  Employee has not and will not use or disclose to the Company any
confidential or proprietary information belonging to others without the written
consent of the person to whom such information is confidential, and Employee
represents that his employment with the Company will not require the use of such
information or the violation of any confidential relationship with any third
party.
     
     7.   Other Property of the Company. All documents, encoded media, and other
          -----------------------------
tangible items provided to Employee by the Company or prepared, generated or
created by Employee or others in connection with any business activity of the
Company are the property of the Company. Upon termination of Employee's
employment with the Company, Employee will promptly deliver to the Company all
such documents, media and other items in his possession, including all complete
or partial copies, recordings, abstracts, notes or reproductions of any kind
made from or about such documents, media, items or information contained
therein. Employee will neither have nor claim any right, title or interest in
any trademark, service mark or trade name owned or used by the Company.

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                                 CONFIDENTIAL


     8.   Inventions and Works of Authorship.
          ----------------------------------  

     (a)  Employee agrees to assign and hereby irrevocably assigns to the
Company all of Employee's right, title and interest in and to any and all
Inventions and Works of Authorship made, generated or conceived by Employee
during the period of his employment with the Company, and Employee agrees to and
shall promptly disclose all such Inventions and Works of Authorship to the
Company in writing. As used herein, "Invention" means any discovery,
improvement, innovation, idea, formula, or shop right (whether or not
patentable, whether or not put into writing and whether or not put into
practice) made, generated or conceived by Employee (whether alone or with
others) while employed by the Company. For purposes of this Agreement, any
discovery, improvement, innovation, idea, formula, or shop right (whether or not
patentable, whether or not put into writing and whether or not put into
practice) relating directly or indirectly to the business of the Company or to
the Company's actual or demonstrably anticipated business, research or
development with respect to which Employee files a patent application within two
years after termination of employment with the Company shall be presumed to be
an Invention. As used herein, "Work of Authorship" means any original work of
authorship within the purview of the copyright laws of the United States of
America, and both the Company and Employee intend and agree that all Works of
Authorship created by Employee in the course of his employment with the Company
will be and shall constitute works made for hire within the meaning and purview
of such copyright laws.

     (b)  Employee will execute and assign any and all applications,
assignments, and other documents and will render all assistance which may be
reasonably necessary for the Company to obtain patent, copyright, or any other
form of intellectual property protection with respect to all Inventions and
Works of Authorship in all countries and will cooperate with Syntroleum as
reasonably necessary to enforce any such intellectual property protection. The
Company will pay Employee $200 for each patent issued to the Company upon which
Employee's name appears as an inventor.

     (c)  The provisions of this Paragraph 8 do not apply to an invention for
which no equipment, supplies, facility or Trade Secret Information of the
Company was used and which was developed entirely on Employee's own time, and
which does not relate (i) directly or indirectly to the business, research or
development of the Company, or (ii) to the Company's actual or demonstrably
anticipated business, research or development. A reasonable determination of the
applicability of this Paragraph 8(a) to an Employee's invention shall be made by
Syntroleum after the Employee submits notification in writing of the invention.
Said notice shall include adequate detail for Syntroleum to evaluate the
invention.

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                                 CONFIDENTIAL


     9.   Limited Covenants Against Competition; Non-Solicitation.
          -------------------------------------------------------

     (a)  Employee acknowledges that the services he is to render to the Company
are of a special and unusual character with a unique value to the Company, the
loss of which cannot adequately be compensated by damages in an action at law.
In view of the unique value to the Company of the services of Employee and
because of the confidential Trade Secret Information to be obtained by or
disclosed to Employee, as set forth above, and as a material inducement to the
Company to enter into this Agreement and to pay to Employee the compensation
stated in Paragraph 2, Employee covenants and agrees that during the period of
Employee's employment within the Company and for a period of two years following
termination of Employee's employment with the Company for any reason,
voluntarily or involuntarily, Employee will not directly or indirectly: (i)
start or participate or assist (as a proprietor, partner, shareholder, lender,
investor, director, employee, consultant, independent contractor or otherwise)
in starting any Competing Business; (ii) assist (as a proprietor, partner,
shareholder (except as a holder of 1% or less of the outstanding voting
securities or income interest), lender, investor (except as a holder of 1% or
less of the outstanding voting securities or income interest), director,
employee, consultant, independent contractor or otherwise) any existing
Competing Business in the design, development or manufacture of any Competing
Product; (iii) sell or assist in the sale of any Competing Product to any person
or organization with whom Employee had any contact while employed with the
Company; (iv) directly or indirectly solicit for employment or employ any of the
Company's employees; or (v) become employed by a former employee of the Company.
Because Syntroleum actively pursues opportunities throughout the world and is
engaged in a world-wide oriented business the Employee acknowledges the
reasonableness of having no geographic limitation hereunder.

     (b)  Employee further acknowledges that, while employed by the Company, he
will have contact with and become aware of the Company's customers and licensees
and their respective representatives, including their names and addresses,
specific needs and requirements, as well as leads and references to prospective
customers and licensees. Employee further acknowledges that loss of such
customers or licensees would cause the Company great and irreparable harm.
Employee agrees that for a period of two years following termination of
Employee's employment with the Company for any reason, voluntarily or
involuntarily, Employee will not directly or indirectly solicit, contact, call
upon, communicate with or attempt to communicate with any customer or licensee,
former customer or licensee, or prospective customer or licensee of the Company
for the purpose of selling, installing, implementing, or modifying any Competing
Product. This restriction shall apply only to any customer or licensee, former
customer or licensee, or prospective customer or licensee of the Company with
whom Employee had contact during the last two years of Employee's employment
with the Company.

     (c)  The Employee agrees that for as long as he is employed by the Company
and for a period of two years after termination of Employee's employment with
the Company for

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                                 CONFIDENTIAL


any reason, voluntarily or involuntarily, Employee will not solicit, recruit,
hire or attempt to solicit, recruit or hire, directly or by assisting others,
any other employee of the Company.

     (d)  As used in this Agreement, (i) "Competing Business" means any person,
entity or organization other than the Company which is engaged in or is about to
become engaged in the design, manufacture or sale of a Competing Product, (ii)
"Competing Product" means any product (including, without limitation, any
chemical formula or process) which is or may be marketed in competition with any
product marketed or under development by the Company at any time, and (iii)
"contact" means interaction between Employee and a customer or licensee, former
customer or licensee, or prospective customer or licensee of the Company, which
takes place to further any business relationship; or performing services for the
customer or licensee, former customer or licensee, or prospective customer or
licensee on behalf of the Company.

     10.  Reasonableness of Restrictions.
          ------------------------------

     (a)  Employee expressly acknowledges that he has carefully read and
considered the provisions of Paragraphs 6, 7, 8 and 9, and, having done so,
agrees that the restrictions set forth in these Paragraphs, including, but not
limited to, the time periods and geographic areas of restriction are fair and
reasonable and are reasonably required for the protection of the interests of
the Company and its officers, directors, shareholders and other employees.

     (b)  In the event that, notwithstanding the foregoing, any of the
provisions of Paragraphs 6, 7, 8 and 9 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless continue to
be valid and enforceable as though the invalid or unenforceable parts had not
been included therein. In the event that any provision of Paragraphs 6, 7, 8 and
9 relating to the time period and/or the areas of restriction and/or related
aspects shall be declared by a court of competent jurisdiction to exceed the
maximum restrictiveness such court deems reasonable and enforceable, the time
period and/or areas of restriction and/or related aspects deemed reasonable and
enforceable by the court shall become and thereafter be the maximum restriction
in such regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court.

     11.  Requests for Clarification. In the event Employee is uncertain as to
          --------------------------
the meaning of any provision of this Agreement or its application to any
particular information, item or activity, Employee will inquire in writing to
the Company, specifying any areas of uncertainty. The Company will respond in
writing within a reasonable time and will endeavor to clarify any areas of
uncertainty, including such things as whether it considers particular
information to be its Trade Secret Information or whether it considers any
particular activity or employment to be in violation of this Agreement.

     12.  Remedies. In the event of a breach or threatened breach of any of the
          --------
covenants in Paragraphs 6, 7, 8 and 9, the Company shall have the right to seek
monetary

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                                 CONFIDENTIAL


damages and equitable relief, including specific performance by means of an
injunction against Employee or against Employee's partners, agents,
representatives, servants, employers, employees, family members and/or any and
all persons acting directly or indirectly by or with him, to prevent or restrain
any such breach.

     13.  Term and Termination.
          -------------------- 

     (a)  The term of this Agreement shall be for an initial term of 12 months
from the effective date hereof, unless sooner terminated as provided herein, and
shall thereafter be automatically renewed for successive terms of 12 months each
unless sooner terminated as provided herein.

     (b)  Employment of Employee under this Agreement may be terminated:

          (i)   by the Company upon the death of Employee.

          (ii)  by the Company if Employee becomes disabled. For the purposes of
     this Agreement, Employee will be deemed disabled if he (i) has been
     declared legally incompetent by a final court decree (the date of such
     decree being deemed to be the date on which the disability occurred), or
     (ii) receives disability insurance benefits from any disability income
     insurance policy maintained by the Company for a period of three
     consecutive months, or (iii) has been found to be disabled pursuant to a
     disability determination. A "disability determination" means a finding that
     Employee, because of a medically determinable disease, injury, or other
     mental or physical disability, is unable to perform substantially all of
     his regular duties to the Company and that such disability is determined or
     reasonably expected to last at least six months. The disability
     determination shall be based upon the written opinion of the physician
     regularly attending Employee whose disability is in question. If the
     Company disagrees with the opinion of this physician (the "First
     Physician"), it may engage, at its own expense, another physician of its
     choice (the "Second Physician") to examine Employee. If the First and
     Second Physicians agree in writing that Employee is or is not disabled,
     their written opinion shall, except as otherwise set forth in this
     subsection, be conclusive on the issue of disability. If the First and
     Second Physicians disagree on the disability of Employee, they shall choose
     a third consulting physician (whose expense shall be borne by the Company),
     and the written opinion of a majority of these three physicians shall,
     except as otherwise provided in this subsection, be conclusive as to
     Employee's disability. The date of any written opinion conclusively finding
     Employee to be disabled is the date on which the disability will be deemed
     to have occurred. If there is a conclusive finding that Employee is not
     totally disabled, the Company shall have the right to request additional
     disability determinations provided it agrees to pay all the expenses of the
     disability determinations and does not request an additional disability
     determination more frequently than once every three months. In connection
     with any disability

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                                 CONFIDENTIAL


     determination, Employee hereby consents to any required medical
     examination, and to waive any applicable physician-patient privilege that
     may arise because of such examination. All physicians except the First
     Physician must be board-certified in the specialty most closely related to
     the nature of the disability alleged to exist.

          (iii) by the Company when Employee reaches mandatory retirement age
     under any retirement policy applicable to all executive officers adopted by
     the Company.

          (iv)  by mutual agreement of Employee and the Company.

          (v)   by the Company upon the dissolution and liquidation of the
     Company (other than as part of a reorganization, merger, consolidation or
     sale of all or substantially all of the assets of the Company whereby the
     business of the Company is continued).

          (vi)  by the Company for just cause at any time upon written notice.
     For purposes of this Agreement, "just cause" shall mean any one or more of
     the following: (A) Employee's material breach of his obligations, duties
     and responsibilities under any term or provision of this Agreement, which
     breach remains uncured for a period of five days after written notice by
     the Company to Employee; (B) Employee's failure to adhere to the reasonable
     standards of performance prescribed by the Company; (C) Employee's act of
     insubordination to the Company's Board of Directors; (D) Employee's gross
     negligence or willful misconduct in the performance of his duties under
     this Agreement; (E) Employee's dishonesty, fraud, misappropriation or
     embezzlement in the course of, related to or connected with the business of
     the Company; (F) Employee's conviction of a felony; or (G) Employee's
     failure (after written notice to Employee of such failure and Employee not
     correcting such failure within five days of such notice) to devote his
     time, attention and best efforts to the business of the Company as provided
     in this Agreement.

          (vii) by either the Company or Employee upon 15 days written notice.

     (c)  Any termination of Employee's employment, either by the Company or
Employee, shall be communicated by a written notice of termination to the other
party.

     (d)  If Employee's employment is terminated pursuant to the terms of this
Agreement for any reason, Employee shall be entitled to all arrearages of salary
and expenses up to and including the date of termination but shall not be
entitled to further compensation. Provided, that if, at any time after the first
12 months from the date of this Agreement, Employee's employment is terminated
by the Company for any reason other than Employee's death, disability or
retirement, the Company's dissolution or just cause as provided in

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                                 CONFIDENTIAL

Paragraphs 13(b)(i), (ii), (iii), (v) or (vi), respectively, Employee shall be
entitled to and the Company shall pay Employee all arrearages of salary and
expenses up to and including the date of termination and, in addition,
Employee's monthly base salary for an additional period of 6 months.

     (e)  Upon expiration of the term of this Agreement or upon earlier
termination of this Agreement, Employee shall deliver all Trade Secret
Information of the Company to an authorized representative of the Company, and
the non-disclosure provisions of Paragraph 6 shall survive such expiration or
                                 -----------       
termination and shall remain in full force and effect for a period of 15 years
from such expiration or termination.

     14.  Change of Control.
          ----------------- 

     (a)  In the event of a Change of Control of the Company and (i) during the
one-year period immediately following any Change of Control, the Company
terminates Employee's employment for any reason other than Employee's death,
disability, retirement or just cause as provided in Paragraphs 13(b)(i), (ii),
(iii) and (vi), respectively, (ii) the Employee terminates his employment for
Good Reason, or (iii) during the Window Period the Company or Employee
terminates Employee's employment for any reason, then the Company or its
successor shall pay Employee his full base salary in effect at the time of the
notice of termination through the date of termination, and in lieu of any
further salary payments for periods subsequent to the date of termination, the
Company or its successor shall pay Employee as severance pay an amount equal to
two times Employee's full base salary in effect on the date of termination
payable in 24 equal monthly installments beginning on the first day of the first
calendar month following the date of Employee's termination and continuing on
the first day of each month thereafter until paid.

     (b)  Anything in this Agreement to the contrary notwithstanding, if a
Change of Control occurs and if the Employee's employment with the Company is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Employee that such termination of employment (i)
was at the request of a third party who has taken steps reasonably calculated to
effect the Change of Control or (ii) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes of this Agreement,
the "Change of Control" shall be deemed to have occurred on the date immediately
prior to the date of such termination of employment.

     (c)  as used in this Agreement, the terms set forth below shall have the
following respective meanings:

          (i)   "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the Agreement Effective Date.

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          (ii)  "Agreement Effective Date" shall mean May 2, 1997.

          (iii) "Associate" shall mean, with reference to any Person, (a) any
     corporation, firm, partnership, association, unincorporated organization or
     other entity (other than the Company or a subsidiary of the Company) of
     which such Person is an officer or general partner (or officer or general
     partner of a general partner) or is, directly or indirectly, the Beneficial
     Owner of 10% or more of any class of equity securities, (b) any trust or
     other estate in which such Person has a substantial beneficial interest or
     as to which such Person serves as trustee or in a similar fiduciary
     capacity and (c) any relative or spouse of such Person, or any relative of
     such spouse, who has the same home as such Person.

          (iv)  "Beneficial Owner" shall mean, with reference to any securities,
     any Person if:

          (a)   such Person or any of such Person's Affiliates and Associates,
directly or indirectly, is the "beneficial owner" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the Agreement Effective Date) such securities or otherwise has the
right to vote or dispose of such securities, including pursuant to any
agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subsection (a) as a result of an
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (i) arises solely from a revocable proxy or
consent given in response to a public (i.e., not including a solicitation
exempted by Rule 14a-2(b)(2) of the General Rules and Regulations under the
Exchange Act) proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations under the
Exchange Act and (ii) is not then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report);

          (b)   such Person or any of such Person's Affiliates and Associates,
directly or indirectly, has the right or obligation to acquire such securities
(whether such right or obligation is exercisable or effective immediately or
only after the passage of time or the occurrence of an event) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, other rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to "beneficially own," (i) securities tendered pursuant
to a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange or (ii) securities issuable upon exercise of Exempt Rights;
or

          (c)   such Person or any of such Person's Affiliates or Associates (i)
has any agreement, arrangement or understanding (whether or not in writing) with
any other

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Person (or any Affiliate or Associate thereof) that beneficially owns such
securities for the purpose of acquiring, holding, voting (except as set forth in
the proviso to subsection (a) of this definition) or disposing of such
securities or (ii) is a member of a group (as that term is used in Rule 13d-5(b)
of the General Rules and Regulations under the Exchange Act) that includes any
other Person that beneficially owns such securities; provided, however, that
nothing in this definition shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to "beneficially
own," any securities acquired through such Person's participation in good faith
in a firm commitment underwriting until the expiration of 40 days after the date
of such acquisition. For purposes hereof, "voting" a security shall include
voting, granting a proxy, consenting or making a request or demand relating to
corporate action (including, without limitation, a demand for a stockholder
list, to call a stockholder meeting or to inspect corporate books and records)
or otherwise giving an authorization (within the meaning of Section 14(a) of the
Exchange Act) in respect of such security.

     The terms "beneficially own" and "beneficially owning" shall have meanings
that are correlative to this definition of the term "Beneficial Owner."

          (v)   "Change of Control" shall mean any of the following (provided,
however, that without limiting the generality of any other provision hereof, no
Change of Control shall be deemed to have occurred as a result of the
consummation of any of the transactions contemplated by the Agreement and Plan
of Merger dated as of March 30, 1998 by and between SLH Corporation, a Kansas
corporation, and the Company (the "Merger Agreement")):

          (a)   any Person (other than an Exempt Person) shall become the
     Beneficial Owner of 30% or more of the shares of Common Stock then
     outstanding or 30% or more of the combined voting power of the Voting Stock
     of the Company then outstanding; provided, however, that no Change of
     Control shall be deemed to occur for purposes of this subsection (a) if
     such Person shall become a Beneficial Owner of 30% or more of the shares of
     Common Stock or 30% or more of the combined voting power of the Voting
     Stock of the Company solely as a result of (i) an Exempt Transaction or
     (ii) an acquisition by a Person pursuant to a reorganization, merger or
     consolidation, if, following such reorganization, merger or consolidation,
     the conditions described in clauses (i), (ii) and (iii) of subsection (c)
     of this definition are satisfied;

          (b)   individuals who, as of the Agreement Effective Date, constitute
     the Board (the "Incumbent Board") cease for any reason to constitute at
     least a majority of the Board; provided, however, that any individual
     becoming a director subsequent to the Agreement Effective Date whose
     election, or nomination for election by the Company's shareholders, was
     approved by a vote of at least a majority of the directors then comprising
     the Incumbent Board shall be considered as though such

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                                 CONFIDENTIAL


individual were a member of the Incumbent Board; provided, further, that there
shall be excluded, for this purpose, any such individual whose initial
assumption of office occurs as a result of any actual or threatened election
contest that is subject to the provisions of Rule 14a-11 under the Exchange Act;

          (c)   approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such reorganization,
merger or consolidation, (i) more than 80% of the then outstanding shares of
common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding Voting Stock
of such corporation is then beneficially owned, directly or indirectly, by all
or substantially all of the Persons who were the Beneficial Owners of the
outstanding Common Stock immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
outstanding Common Stock, (ii) no Person (excluding any Exempt Person or any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 30% or more of the Common Stock then
outstanding or 30% or more of the combined voting power of the Voting Stock of
the Company then outstanding) beneficially owns, directly or indirectly, 30% or
more of the then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or the combined voting power
of the then outstanding Voting Stock of such corporation and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement or initial action by
the Board providing for such reorganization, merger or consolidation; or

          (d)   approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company unless such liquidation or dissolution
is approved as part of a plan of liquidation and dissolution involving a sale or
disposition of all or substantially all of the assets of the Company to a
corporation with respect to which, following such sale or other disposition, all
of the requirements of clauses (ii)(A), (B) and (C) of this subsection (d) are
satisfied, or (ii) the sale or other disposition of all or substantially all of
the assets of the Company, other than to a corporation, with respect to which,
following such sale or other disposition, (A) more than 80% of the then
outstanding shares of common stock of such corporation and the combined voting
power of the Voting Stock of such corporation is then beneficially owned,
directly or indirectly, by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately prior to such sale
or other disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the outstanding Common
Stock, (B) no Person (excluding any Exempt Person and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or

                                       12
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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL


     indirectly, 30% or more of the Common Stock then outstanding or 30% or more
     of the combined voting power of the Voting Stock of the Company then
     outstanding) beneficially owns, directly or indirectly, 30% or more of the
     then outstanding shares of common stock of such corporation and the
     combined voting power of the then outstanding Voting Stock of such
     corporation and (C) at least a majority of the members of the board of
     directors of such corporation were members of the Incumbent Board at the
     time of the execution of the initial agreement or initial action of the
     Board providing for such sale or other disposition of assets of the
     Company.

          (vi)   "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended .

          (vii)  "Exempt Person" shall mean the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of the
Company, and any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan.

          (viii) "Exempt Rights" shall mean any rights to purchase shares of
Common Stock or other Voting Stock of the Company if at the time of the issuance
thereof such rights are not separable from such Common Stock or other Voting
Stock (i.e., are not transferable otherwise than in connection with a transfer
of the underlying Common Stock or other Voting Stock) except upon the occurrence
of a contingency, whether such rights exist as of the Agreement Effective Date
or are thereafter issued by the Company as a dividend on shares of Common Stock
or other Voting Securities or otherwise.

          (ix)   "Exempt Transaction" shall mean an increase in the percentage
of the outstanding shares of Common Stock or the percentage of the combined
voting power of the outstanding Voting Stock of the Company beneficially owned
by any Person solely as a result of a reduction in the number of shares of
Common Stock then outstanding due to the repurchase of Common Stock or Voting
Stock by the Company, unless and until such time as (a) such Person or any
Affiliate or Associate of such Person shall purchase or otherwise become the
Beneficial Owner of additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock or additional Voting Stock
representing 1% or more of the combined voting power of the then outstanding
Voting Stock, or (b) any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of the
then outstanding shares of Common Stock or Voting Stock representing 1% or more
of the combined voting power of the then outstanding Voting Stock shall become
an Affiliate or Associate of such Person.

          (x)    "Good Reason" shall mean:
 
                 (a) the assignment to the Employee of any duties materially
          inconsistent in any respect with the Employee's position (including
          status,

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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL


          offices, titles and reporting requirements), authority, duties or
          responsibilities as contemplated by Section 1 of this Agreement, or
          any other action by the Company which results in a diminution in such
          position, authority, duties or responsibilities, excluding for this
          purpose an isolated, insubstantial and inadvertent action not taken in
          bad faith and which is remedied by the Company promptly after receipt
          of notice thereof given by the Employee;

                 (b) any material failure by the Company to comply with any of
          the provisions of this Agreement, other than an isolated,
          insubstantial and inadvertent failure not occurring in bad faith and
          which is remedied by the Company promptly after receipt of notice
          thereof given by the Employee;

                 (c) the Company's requiring the Employee to be based at any
          office outside the Tulsa metropolitan area;

                 (d) any purported termination by the Company of the Employee's
          employment otherwise than as expressly permitted by this Agreement; or


          (xi)   "Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or other entity.

          (xii)  "Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to vote
generally in the election of directors of such corporation (excluding any class
or series that would be entitled so to vote by reason of the occurrence of any
contingency, so long as such contingency has not occurred).

          (xiii) "Window Period" shall mean the 60-day period immediately
following elapse of one year after any Change of Control.

     15.  Resignation Upon Termination. In the event of termination of this
          ----------------------------
Agreement other than for death, Employee agrees to resign from all positions
held in the Company, including without limitation any position as a director,
officer, agent, trustee or consultant of the Company or any affiliate of the
Company.

     16.  Notice to Subsequent Employers. For a period of two years after
          ------------------------------ 
termination of Employee's employment with the Company for any reason, Employee
will inform any new employer (before accepting employment) of the obligations of
Employee under Paragraphs 6, 7, 8, 9, and 10 of this Agreement.

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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL



     17.  Obligations Unconditional. The obligations of the parties under this
          ------------------------- 
Agreement are unconditional and do not depend upon the performance of any
agreements, duties, obligations, or terms outside this Agreement.
     
     18.  Waiver. A party's failure to insist on compliance or enforcement of
          ------
any provision of this Agreement shall not affect the validity or enforceability
or constitute a waiver of future enforcement of that provision or of any other
provision of this Agreement by that party or any other party.

     19.  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
          -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA, UNITED STATES OF AMERICA,
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. The Company and Employee
expressly and irrevocably consent and submit to the nonexclusive jurisdiction of
any state or federal court sitting in Tulsa County, Oklahoma and agree that, to
the fullest extent allowed by law, such Oklahoma state or federal courts shall
have jurisdiction over any action, suit or proceeding arising out of or relating
to this Agreement. The Company and Employee each irrevocably waive, to the
fullest extent allowed by law, any objection either of them may have to the
laying of venue of any such suit, action or proceeding brought in any state or
federal court sitting in Tulsa County, Oklahoma based upon a claim that such
court is inconvenient or otherwise an objectionable forum. Any process in any
action, suit or proceeding arising out of or relating to this Agreement may,
among other methods, be served upon the Company or Employee by delivering it or
mailing it to their respective addresses set forth herein. Any such delivery or
mail service shall be deemed to have the same force and effect as personal
service in the State of Oklahoma.

     20.  Severability. If for any reason any paragraph, term or provision of
          ------------
this Agreement is held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed and enforced as if such provision had not been
included herein and all other valid provisions herein shall remain in full force
and effect. If for any reason the restrictions and covenants contained herein
are held to cover a geographical area or be for a length of time which is
unreasonable or unenforceable, or in any other way are construed to be too broad
or to any extent invalid, then to the extent the same are or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a covenant having
the maximum area, time or other provisions (not greater than those contained
herein) as shall be valid and enforceable under such applicable law.
     
     21.  Jurisdiction. The Company and Employee intend to and hereby confer
          ------------
jurisdiction to enforce the provisions of this Agreement and any restrictive
covenants contained herein upon the courts of any jurisdiction within the
geographical scope of such covenants. If the courts of any one or more of such
jurisdictions hold the provisions of this

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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL



Agreement or any of the restrictive covenants contained herein unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
Company and Employee that such determination not bar or in any way affect the
Company's right to the relief provided herein in the courts of any other
jurisdiction within the geographical scope of such covenants, as to breaches of
such covenants, such covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent covenants.

     22.  Notice. Any and all notices required or permitted herein shall be
          ------
deemed delivered if delivered personally or if mailed by registered or certified
mail to the Company at its principal place of business and to Employee at the
address hereinafter set forth following Employee's signature, or at such other
address or addresses as either party may hereafter designate in writing to the
other.

     23.  Amendments. This Agreement may be amended at any time by mutual
          ----------
consent of the parties hereto, with any such amendment to be invalid unless in
writing, signed by the Company and Employee.

     24.  Burden and Benefit. This Agreement, together with any amendments
          ------------------ 
hereto, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, assigns, heirs and personal
representatives. The Company may, in its sole discretion, assign this Agreement
or its rights hereunder to any parent, affiliate, shareholder, or successor of
the Company, or to any person or entity which purchases substantially all of the
assets of the Company. Employee may not transfer or assign this Agreement or any
of Employee's rights or obligations under this Agreement.

     25.  References to Gender and Number Terms. In construing this Agreement,
          -------------------------------------
feminine or number pronouns shall be substituted for those masculine in form and
vice versa, and plural terms shall be substituted for singular and singular for
plural in any place which the context so requires.

     26.  Headings. The various headings in this Agreement are inserted for
          --------
convenience only and are not part of the Agreement.

     27.  Entire Agreement. This Agreement contains the entire understanding
          ---------------- 
and agreement between the parties relating to the subject matter hereof.

     28.  Counterparts. This Agreement may be executed in one or more
          ------------
counterparts, and all such counterparts shall constitute one and the same
instrument.

     29.  Severance Compensation. In the event of termination of Employee's
          ---------------------- 
employment with the Company under the terms of this Agreement which provide for
payment by the Company to Employee of severance compensation, the amount of such
severance compensation shall in no event be greater than the amount which would
be

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                        SYNTROLEUM-EMPLOYMENT AGREEMENT
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                                 CONFIDENTIAL


deductible by the Company under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), after taking into consideration all payments to
Employee covered by Code Section 280G which Employee receives or is deemed to
receive (i) under this Agreement; (ii) under the Company's 1993 Stock Option and
Incentive Plan, as amended, by reason of the acceleration of the right to
exercise any options (including any related stock appreciation rights) granted
thereunder or the acceleration of the vesting of any restricted stock awards
granted thereunder; or (iii) under any new plan or arrangement implemented by
the Company after the date of this Agreement which would otherwise be considered
a "parachute payment" under Section 280G. In the event such payments exceed the
amount which would be deductible by the Company under Code Section 280G, the
timing of such payments shall be extended or otherwise modified such that such
payments shall be deductible by the Company under Code Section 280G and in a
manner which, to the extent possible, provides Employee the full benefit of such
payments as originally agreed to.

       IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the date and year first above written.


                                    COMPANY:

                                    SYNTROLEUM CORPORATION


                                    By: /s/ MARK A. AGEE             
                                        -------------------------------- 
                                        Mark A. Agee, President

                                        Syntroleum Corporation.
                                        1350 South Boulder, Suite 1100
                                        Tulsa, Oklahoma 74119

                                    EMPLOYEE:


                                    By: /s/ MICHAEL L. STEWART          
                                        -------------------------------- 
                                        Michael L. Stewart 

                                        Home address:

                                        9735 S. Maplewood
                                        Tulsa, Oklahoma 74137

                                       17